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Exhibit
10.3
WRAPAROUND PROMISSORY
NOTE
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| $1,100,000.00 |
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January 5, 2005
Memphis, Tennessee
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FOR VALUE RECEIVED, the
undersigned Maker, hereby promises to pay to the order of VCG REAL
ESTATE HOLDINGS, INC., a Colorado corporation, (hereinafter
“Lender”), or the subsequent holder hereof, the
principal sum of ONE MILLION ONE HUNDRED THOUSAND AND 00/100
($1,100,000.00) DOLLARS, with interest from the date hereof until
paid at the rate per annum hereinafter stipulated, principal and
interest to be due and payable as follows:
| a. |
The outstanding principal of this Note shall bear interest from
the date hereof based on a rate of 7% per annum. |
| b. |
On the principal sum of Six Hundred Thousand and 00/100
($600,000.00) (“First Debt”), Maker shall pay
installments of principal and interest in the amount of $6,966.51
commencing on the 5th day of February, 2005, and shall continue to
be payable on the 5th day of each month thereafter, until the 5th
day of July, 2005, at which time the entire outstanding principal
balance on said $600,000.00 and all accrued but unpaid interest due
thereon shall be paid. |
| c. |
On the principal sum of Five Hundred Thousand and 00/100
($500,000.00) (“Second Debt”), Maker shall pay
installments of principal and interest in the amount of $3,326.51
commencing on the 5th day of February, 2005, and shall continue to
be payable on the 5th day of each month thereafter, until the 5th
day of January, 2010, at which time the entire outstanding
principal balance on said $500,000.00 and all accrued but unpaid
interest due thereon shall be paid. |
| d. |
The aforesaid installment payments are to be applied first to
interest at the rate as aforesaid on the principal sum, or so much
thereof as shall from time to time remain unpaid, and the balance
of each installment shall be applied on account of
principal. |
| e. |
All installments of principal and interest of this Note, if not
paid within ten (10) days after the due date, shall include a late
payment charge equal to five (5%) percent of the amount of the
delinquent installment. It is agreed the late payment charge is
reasonable compensation as liquidated damages to compensate the
holder of this Note for the damages for the loss of use of money,
the frustration of the holder’s meeting its financial
obligations, and expenses associated with such late payment, all of
which are difficult to ascertain; provided, however, that neither
the right of the holder to receive such late charge nor the
claiming or receiving of such late charge shall in any way delay or
prevent the holder’s exercising its rights or remedies for
Maker’s default. |
This Note is a
“Wraparound Note”, i.e. , a portion of the
principal amount of this Note is represented by the unpaid balance
of that certain Note or other contractual obligations (the
“Underlying Note”) as follows:
| Note |
dated July 16, 2003, executed by VCG Real Estate Holdings,
Inc., made payable to Community Banks of Colorado, in the original
principal amount of $824,000.00, and having an unpaid principal
balance as of January 5, 2005 of $735,174.66. |
All payments under this Note
are payable in lawful money of the United States of America which
shall be legal tender for the payment of debts, public and private,
at the time of payment. The Maker shall pay the installments of
principal and interest due under this Note to Lender at 1601 W.
Evans Avenue, #200, Denver, Colorado 80223, or such other place as
is designated by Lender. The Lender in turn (a) will use a portion
of such installments as paid to pay the installments of principal
and interest evidenced by the Underlying Note directly to the
holder thereof in the manner provided in the Underlying Note as the
same become due and payable; (b) will apply the balance, if any, of
said payment to this Note; (c) will pay the principal balance and
accrued interest of the Underlying Note when it matures by
prepayment, acceleration or on its scheduled maturity date, and
will furnish evidence of payment to the Maker at or prior to the
date of maturity; and (d) will thereafter apply the principal
balance and accrued interest thereon to this Note in accordance
with the terms hereof.
If an event of default shall
have occurred under the Underlying Note not cured prior to the
expiration of any grace period by Lender, the Maker may, but is not
obligated to, make any payment directly to the holder of the
Underlying Note, or perform any act required under the Underlying
Note, in any form and manner deemed expedient by Maker, including
full or partial payments of principal or interest on the Underlying
Note and the purchase, discharge, compromise or settlement of the
Underlying Note. In such event, Maker shall be allowed to deduct
such payments to said holder of the Underlying Note from the
amounts due Lender.
The references contained in
this Note to the obligation of the Maker or to the Lender or holder
hereof to pay any sum or sums owing on the Underlying Note shall
not constitute an assumption of a personal liability for
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